Participation

IN BUSINESS

Joint consultation in decision making, goal setting, profit sharing, teamwork, and other such measures through which a firm attempts to foster or increase its employees’ commitment to collective objectives.

Partnership

IN BUSINESS

A type of business organization in which two or more individuals pool money, skills, and other resources, and share profit and loss in accordance with terms of the partnership agreement. In absence of such agreement, a partnership is assumed to exit where the participants in an enterprise agree to share the associated risks and rewards proportionately.

IN EVALUATING

A collaboration between individuals and/or organizations to achieve mutually agreed upon objectives. The concept of partnership connotes shared goals, common responsibility or outcomes, distinct accountabilities and reciprocal obligations. Partners may include governments, civil society, non-governmental organizations, universities, professional and business associations, multilateral organizations, private companies, etc.

Pay for performance (Noun)

IN BUSINESS

Pay-for-performance (“P4P”) is a term that describes payment systems that offer financial rewards to providers who achieve, improve, or exceed their performance on specified quality and cost measures, as well as other benchmarks.

Pay for success (PFS)

IN PHILANTHROPY

A way of financing social services to help governments target limited dollars to achieve a positive, measurable outcome. Under the Pay for Success (PFS) model, a government agency commits funds to pay for a specific outcome that is achieved within a given timeframe. The financial capital to cover the operating costs of achieving the outcome is provided by independent investors. In return for accepting the risks of funding the project, the investors may expect a return on their investment if the project is successful; however, payment of the committed funds by the government agency is contingent on the validated achievement of results. In this way, the PFS model shifts the burden of investment risk from the government to private investors, effectively creating a social investment market where the government only pays for results.

“Pay for Success” is the US term for what are known in the UK and elsewhere as Social Impact Bonds. However, sometimes “Pay for Success” refers both to Social Impact Bonds and other outcomes-based contracts, such as Pay for Performance (P4P) and rate cards. “Pay for Success” can apply to environmental services and goals as well as social goals.

Payback period

IN FINANCE

The payback period is the length of time required to recover the cost of an investment. The payback period of a given investment or project is an important determinant of whether to undertake the position or project, as longer payback periods are typically not desirable for investment positions. The payback period ignores the time value of money, unlike other methods of capital budgeting, such as net present value, internal rate of return or discounted cash flow.

Payment by results (PBR)

IN PHILANTHROPY

The practice of paying providers for delivering public services based wholly or partly on the results that are achieved. It is a relatively new model for paying for public services, and contrasts with the previously common practice of paying for the inputs of services delivered. Many public services operate by purchasing infrastructure or inputs (such as staff, buildings and equipment) that are then used to undertake activities (such as appointments, sessions or treatments) that seek to deliver outcomes (such as increased health or education, or reduced crime). Payment by Results (PbR) seeks to improve the productivity of public service spending by paying only when specific outputs or outcomes are achieved.

The term “Payment by results” is predominately used in the UK. “Pay for Performance” is more common in the US.

Performance

IN GENERAL

a) The action or process of performing a task or function. b) A task or operation seen in terms of how successfully it is performed. c) c) The capabilities of a machine, product, or vehicle. d) The extent to which an investment is profitable, especially in relation to other investments.

IN EVALUATING

The degree to which an intervention or a development partner operates according to specific criteria/standards/guidelines or achieves results in accordance with stated goals or plans.

Differences in use and meaning of “performance” generally relate to whether the object is a task, a person / job, equipment, a company, a financial instrument, or an economy. Assessment of performance can also depend on perspective. For example, achievement of a narrow goal may be seen as a success from one perspective but not successful from another that considers the narrow goal lacking in ambition.

Performance indicator(s)

IN EVALUATING

A variable that allows the verification of changes in the intervention or shows results relative to what was planned.

IN BUSINESS

In business, these are used for evaluating specific goals and objectives.

“Performance Indicators”, or “Key Performance Indicators”, can be anything that are used to assess performance toward a goal or objective.

Performance management

IN BUSINESS

The management of employees, departments, and organizations to ensure that goals and objectives are being reached efficiently and effectively. Performance management involves defining what effective performance looks like, as developing the tools and procedures necessary to measure performance.

Philanthropy

IN PHILANTHROPY

Philanthropy is defined in different ways. The origin of the word philanthropy is Greek and means love for mankind. Today, philanthropy includes the concept of voluntary giving by an individual or group to promote the common good. Philanthropy also commonly refers to grants of money given by foundations to nonprofit organizations. Philanthropy addresses the contribution of an individual or group to other organizations that in turn work for the causes of poverty or social problems-improving the quality of life for all citizens. Philanthropic giving supports a variety of activities, including research, health, education, arts and culture, as well as alleviating poverty.

Philanthropy is taking on increasingly diverse forms as philanthropists use a wide range of financial products, including not only the traditional grant, but also various structures of debt, equity, fixed-income securities, and guarantees.

Place-based investment

IN FINANCE

Place based investment works to create economic and social outcomes through investing in a specific region or community, particularly those experiencing decline or disadvantage. Such investments create sustained, positive cycles of economic development and regeneration by providing local businesses with access to capital, markets, and growth opportunities, as well as fostering job creation, and spending power in the community.

“Placebo effect” is a medical concept applied to the evaluation of social interventions. A placebo is an inert substance, such as a sugar pill, that is not known to have physiological or therapeutic benefits. A placebo is either used to make people better psychologically, or in drug testing as part of a controlled trial to deceive people (with their consent) that they are taking something designed to improve their condition. Identifying placebo effects is part of understanding the causal mechanisms by which an intervention has positive results. For social interventions, it helps distinguish whether any positive effects flow from the intrinsic nature of the intervention or people’s beliefs about the intervention.

Portfolio

IN GENERAL

a) A range of investments held by a person or organization. b) A range of products or services offered by an organization. c) A set of pieces of creative work intended to demonstrate a person’s ability to a potential employer.

Power

IN GENERAL

a) The ability or capacity to do something or act in a particular way. b) The capacity or ability to direct or influence the behavior of others or the course of events. c) Physical strength and force exerted by something or someone. d) Energy that is produced by mechanical, electrical, or other means and used to operate a device.

IN EVALUATING

Number or percentage that indicates the probability a study will obtain a statistically significant effect. For example, a power of 80 percent (or 0.8) means that a survey or study (when conducted repeatedly over time) is likely to produce a statistically significant result 8 times out of 10.

“Power” has multiple meanings. In evaluation it may be used as a shortened version of statistical power, the probability that a study will find an effect when there is an effect there to be detected. A low power study might not find a statistically significant effect even if there is one because the statistical test might conclude the positive result could have occurred as matter of chance.

Power calculation

IN EVALUATING

A calculation of the sample required for the impact evaluation, which depends on the minimum effect size and required level of confidence.

“Power calculation” is a statistical term, not related to assessing differences in power of different stakeholders. See entry for “power”.

Private equity

IN FINANCE

Capital that is not noted on a public exchange. Private equity is composed of funds and investors that directly invest in private companies, or that engage in buyouts of public companies, resulting in the delisting of public equity. Institutional and retail investors provide the capital for private equity, and the capital can be utilized to fund new technology, make acquisitions, expand working capital, and to bolster and solidify a balance sheet.

The difference between public and private equity is the former is more tradable and hence more liquid.

Private foundation

IN PHILANTHROPY

A nongovernmental, nonprofit organization with funds (usually from a single source, such as an individual, family, or corporation) and program managed by its own trustees or directors, established to maintain or aid social, educational, religious, or other charitable activities serving the common welfare, primarily through grantmaking. U.S. private foundations are tax-exempt under Section 501(c)(3) of the Internal Revenue Code and are classified by the IRS as a private foundation as defined in the code.

Program evaluation

IN EVALUATING

The systematic collection of information about the activities, characteristics, and outcomes of programs to make judgments about the program, improve program effectiveness, and/or inform decisions about future program development.

Program Related Investment (PRI)

IN FINANCE

An investment made by foundations to support charitable activities that involve the potential return of capital within an established time frame. Program related investments include financing methods commonly associated with banks or other private investors, such as loans, loan guarantees, linked deposits, and even equity investments in charitable organizations or in commercial ventures for charitable purposes.

IN FINANCE

An investment made by a U.S.-based foundation that qualifies as a charitable expense under the tax code, allowing the foundation to include the investment as part of the 5% of assets it must distribute philanthropically each year to maintain its non-profit status.

Project evaluation

IN EVALUATING

Evaluation of an individual intervention designed to achieve specific objectives within specified resources and implementation schedules, often within the framework of a broader program. Cost benefit analysis is a major instrument of project evaluation for projects with measurable benefits. When benefits cannot be quantified, cost effectiveness is a suitable approach.

Public charity

IN PHILANTHROPY

Public charities include a wide variety of charitable organizations, including hospitals, schools, churches, and organizations that make grants to others. Charities that primarily make grants are commonly referred to as public foundations. Most of these foundations are publicly supported charities, meaning they receive their funds from multiple sources, which may include private foundations, individuals, government agencies, and fees they charge for charitable services they provide. Some foundations are public charities because they meet at least one of the US Internal Revenue Service (IRS) tests for qualifying as a public charity. One kind of public charity, known as a supporting organization, is recognized by the IRS as charitable simply because of its legal relationship to one or more other public charities. A community foundation is yet another kind of public charity. In some cases, corporate foundations are set up as public, rather than private, foundations.

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